April 14, 2008 at 11:47 AM EDT
Credential Securities will probably unveil a plan to buy out frozen ABCP
held by more than 300 clients this week, the investor committee
overseeing a restructuring of $32-billion of frozen paper told investors
Credential is working on a plan and the committee is "reasonably
optimistic it will be announced in the next few days," said committee
chairman Purdy Crawford.
Small investors who bought asset-backed commercial paper and ended up
stuck with notes that couldn't be traded or redeemed have been pushing
to get all their money back as a restructuring nears completion. The
committee wants to have the small investors taken care of because they
have the votes to ensure that the restructuring proposal will pass.
Canaccord Capital Inc., which also sold ABCP to clients, last week
unveiled a plan that will get almost all the firm's clients all their
money back, plus any interest they are entitled to under the
restructuring. Mr. Crawford told investors on a Monday conference call
that Credential's plan may be modelled on Canaccord's proposal.
"We are very, very hopeful that Credential will come with a plan very
similar to Canaccord's, and if that's the case, and we're optimistic
that that will be the case, then you will receive your principal back,"
Mr. Crawford said, adding that investors "should also get accrued
Credential is the securities-dealer arm of a group of Canadian credit